Don't Wait For The Rate.
When considering your next move in Real Estate, whether it be, buying, selling or perhaps both, people often consider how the current interest rate will impact that move. While this is an important consideration, it is not the only one. Interest rates have risen from what seemed like a historic low - it might have you thinking: Interest rates are falling with every Bank of Canada meeting, maybe I should wait? Let’s review the long term effects and factors that coincide with interest rates, from both a buyers and a sellers perspective.
First and foremost, you are losing out on equity!! As a buyer, regardless of the current rate, each month that you wait to enter the market is a month that you are losing out on the equity that home ownership provides. The sooner you buy, the sooner you will start to grow your equity. Although there are occasional dips in the market, if we follow the historic trends, homes increase in value over time. If you plan to stay put for a few years, then get your foot in the door and watch your equity grow. Despite the status of interest rates, the market continues to flow. Don’t let the fear of rates scare you from missing out on that dream home. Talk to a mortgage professional who will provide you with the specific options that can work in your favour. You can buy earlier and still capitalize on falling rates, all while you are living in your new home. Historically, lower rates mean higher sale prices and more competition which in turn has the potential to cause monthly mortgage payments to be higher than if you bought now with a higher rate. While this isn’t always the case, it certainly is something to consider and advise your mortgage professional about.
Have you heard the concept that lower rates equal inflation? For a seller, this concept is way too true and undermines the effectiveness of waiting for a lower interest rate. Sellers often fear that with higher rates they won’t get the same return on their home, while this can sometimes be the case, I invite you to consider the opposing end. What if I told you might even save money on your next home even with rates being up? Have you talked to a lender to see if this is the case for you? As a seller, nine times out of ten you are going to be accompanying the sale of your home with the purchase of a new one. Sell for less, buy for less or sell for more, buy for more, when buying and selling it is a wash. Talk to a mortgage professional along with your local realtor to see if you might still be able to benefit from high rates!
